EX-10.1






RETENTION AND SEPARATION AGREEMENT

AND GENERAL RELEASE OF ALL CLAIMS




This Retention and Separation Agreement and General Release of All Claims (“Agreement”) is
made by and between La Jolla Pharmaceutical Company (“LJPC”) and Deirdre Y. Gillespie M.D.
(“Gillespie”) with respect to the following facts:



A. Gillespie is currently employed by LJPC as the President and Chief Executive Officer
pursuant to a Chief Executive Officer Employment Agreement dated March 15, 2006 and Amendment to
Chief Executive Officer Employment Agreement dated July 31, 2007 and Amendment to Chief Executive
Officer Employment Agreement dated December 31, 2008 (collectively referred to as “Employment
Agreement”), which provides for severance in exchange for a release of all claims, in the event
Gillespie’s employment is involuntarily terminated without Cause.



B. Due to the negative result of LJPC’s clinical trial, LJPC is considering either a merger or
liquidation (the “Transaction”) that will result in the involuntarily termination of Gillespie’s
employment with LJPC without Cause, effective on the closing of the Transaction or March 31, 2010,
whichever occurs first (“Separation Date”).



C. In order to retain Gillespie’s services through the Separation Date, the parties wish to
supersede the severance provisions of the Employment Agreement and proceed in accordance with the
terms and conditions in this Agreement.



D. The parties desire to settle all claims and issues that have, or could have been raised, in
relation to Gillespie’s employment with LJPC and arising out of or in any way related to the acts,
transactions or occurrences between Gillespie and LJPC to date, including, but not limited to,
Gillespie’s employment with LJPC or the termination of that employment, on the terms set forth
below.



THEREFORE, in consideration of the promises and agreements hereinafter set forth, it is agreed
by and between the undersigned as follows:



1. Retention Bonus. LJPC agrees to pay Gillespie a retention bonus of
$202,800.00, less all legally required payroll deductions and withholdings (“Retention Bonus”),
payable in a lump sum on the first regular pay day following the Effective Date of this Agreement
as provided in paragraph 10.2 below. Gillespie acknowledges and agrees that the Retention Bonus is
conditioned on Gillespie remaining employed by LJPC through and including the Separation Date. If
Gillespie voluntarily resigns her employment prior to the Separation Date, Gillespie will
immediately repay the Retention Bonus.



2. Severance Payment. LJPC agrees to pay Gillespie a severance payment of
$405,600.00, less all legally required payroll deductions and withholdings (“Severance Payment”),
payable in a lump sum on the Effective Date of the Amendment to this Agreement as provided in
paragraph 11 below and attached to this Agreement. Gillespie acknowledges and agrees the Severance
Payment constitutes adequate legal consideration for the promises and representations made by
Gillespie in this Agreement.



3. General Release. Gillespie unconditionally, irrevocably and absolutely
releases and discharges LJPC, and any parent and subsidiary corporations, divisions and affiliated
corporations, partnerships or other affiliated entities of LJPC, past and present, as well as
LJPC’s employees, officers, directors, agents, successors and assigns (collectively, “Released
Parties”), from all claims related in any way to Employment Agreement and all transactions or
occurrences between them to date, to the fullest extent permitted by law, including, but not
limited to, Gillespie’s employment with LJPC, the termination of Gillespie’s employment, and all
other losses, liabilities, claims, charges, demands and causes of action, known or unknown,
suspected or unsuspected, arising directly or indirectly out of or in any way connected with
Gillespie’s employment with LJPC. This general release is intended to have the broadest possible
application and includes, but is not limited to, any tort, contract, common law, constitutional or
other statutory claims, including, but not limited to alleged violations of the California Labor
Code or the federal Fair Labor Standards Act, Title VII of the Civil Rights Act of 1964 and the
California Fair Employment and Housing Act, the Americans with Disabilities Act, the Age
Discrimination in Employment Act of 1967, as amended, and all claims for attorneys’ fees, costs and
expenses. Gillespie expressly waives Gillespie’s right to recovery of any type, including damages
or reinstatement, in any administrative or court action, whether state or federal, and whether
brought by Gillespie or on Gillespie’s behalf, related in any way to the matters released herein.
However, this general release is not intended to bar any claims that, by statute, may not be
waived, such as claims for workers’ compensation benefits, unemployment insurance benefits,
statutory indemnity, and any challenge to the validity of Gillespie’s release of claims under the
Age Discrimination in Employment Act of 1967, as amended, as set forth in this Agreement.



4. California Civil Code Section 1542 Waiver. Gillespie expressly
acknowledges and agrees that all rights under Section 1542 of the California Civil Code are
expressly waived. That section provides:



A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.



5. Representation Concerning Filing of Legal Actions. Gillespie
represents that, as of the date of this Agreement, she has not filed any lawsuits, charges,
complaints, petitions, claims or other accusatory pleadings against LJPC or any of the other
Released Parties in any court or with any governmental agency.



6. Nondisparagement. Gillespie agrees that she will not make any
voluntary statements, written or oral, or cause or encourage others to make any such statements
that defame, disparage or in any way criticize the personal and/or business reputations, practices
or conduct of LJPC or any of the other Released Parties.



7. Confidentiality and Return of LJPC Property. By signing this
Agreement, Gillespie represents and warrants that Gillespie has, or will, return to LJPC on or
before the Separation Date, all LJPC property, data and information belonging to LJPC and agrees
not use or disclose to others any confidential or proprietary information of LJPC or the Released
Parties.



8. Continuing Obligations. Gillespie further agrees to comply with the
continuing obligations regarding confidentiality set forth in the surviving provisions of the
Invention and Confidential Information Agreement signed by Gillespie.



9. No Admissions. By entering into this Agreement, the Released Parties
make no admission that they have engaged, or are now engaging, in any unlawful conduct. The
parties understand and acknowledge that this Agreement is not an admission of liability and shall
not be used or construed as such in any legal or administrative proceeding.



10. Older Workers’ Benefit Protection Act. This Agreement is intended to
satisfy the requirements of the Older Workers’ Benefit Protection Act, 29 U.S.C. sec. 626(f).
Gillespie, by this Agreement, is advised to consult with an attorney before executing this
Agreement.



10.1 Acknowledgments/Time to Consider. Gillespie acknowledges and agrees
that (a) the Retention Bonus and Severance Payment are sums to which she is not otherwise entitled
absent the signing of this Agreement; (b) Gillespie has read and understands the terms of this
Agreement; (c) Gillespie has been advised in writing to consult with an attorney before executing
this Agreement; (d) Gillespie has obtained and considered such legal counsel as she deems
necessary; (e) Gillespie has been given twenty-one (21) days to consider whether or not to enter
into this Agreement (although she may elect not to use the full 21-day period at her option); and
(f) by signing this Agreement, Gillespie acknowledges that she does so freely, knowingly, and
voluntarily.



10.2 Revocation/Effective Date. This Agreement shall not become effective
or enforceable until the eighth day after Gillespie signs this Agreement. In other words, she may
revoke her acceptance of this Agreement within seven (7) days after the date she signs it.
Gillespie’s revocation must be in writing and received by Craig R. Smith M.D., Chairman, Board of
Directors, by 5:00 p.m. Pacific Time on the seventh day in order to be effective. If Gillespie does
not revoke acceptance within the seven (7) day period, her acceptance of this Agreement shall
become binding and enforceable on the eighth day (“Effective Date”). The Retention Bonus shall
become due and payable in accordance with paragraph 1, provided this Agreement has not been
revoked.



10.3 Preserved Rights of Gillespie. This Agreement does not waive or
release any rights or claims that Gillespie may have under the Age Discrimination in Employment Act
that arise after the execution of this Agreement. In addition, this Agreement does not prohibit
Gillespie from challenging the validity of this Agreement’s waiver and release of claims under the
Age Discrimination in Employment Act of 1967, as amended.



11. Reaffirmation. Gillespie agrees to execute the attached Amendment to
Agreement (“Amendment”) on or about the Separation Date in order to extend and reaffirm the
promises and covenants made by her in this Agreement through the Separation Date, including, but
not limited to, the general release of claims. If Gillespie fails to execute the Amendment within
the time provided in the Amendment or effectively revokes her acceptance of the Amendment,
Gillespie will not receive the Severance Payment set forth in paragraph 2 above or any part
thereof.



12. Full Defense. This Agreement may be pled as a full and complete
defense to, and may be used as a basis for an injunction against, any action, suit or other
proceeding that may be prosecuted, instituted or attempted by Gillespie in breach hereof.



13. Severability. In the event any provision of this Agreement shall be
found unenforceable, the unenforceable provision shall be deemed deleted and the validity and
enforceability of the remaining provisions shall not be affected thereby.



14. Applicable Law. The validity, interpretation and performance of this
Agreement shall be construed and interpreted according to the laws of the United States of America
and the State of California.



15. Entire Agreement; Modification. This Agreement, including the
Amendment and the surviving provisions of the Invention and Confidential Information Agreement
previously executed by Gillespie, is intended to be the entire agreement between the parties and
supersedes and cancels any and all other and prior agreements, written or oral, between the parties
regarding this subject matter. Except as expressly amended hereby, all other terms and provision
of the Employment Agreement shall remain in full force and effect. This Agreement may be amended
only by a written instrument executed by all parties hereto.



THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH AND EVERY
PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE EXECUTED THIS AGREEMENT ON THE DATES SHOWN
BELOW.



	 	 	 
	Dated: December 4, 2009
	 	By: /s/ Deirdre Y. Gillespie M.D.

Deirdre Y. Gillespie M.D.

	 	 	La Jolla Pharmaceutical Company

	Dated: December 4, 2009
	 	By: /s/ Craig R. Smith M.D.

Craig R. Smith M.D.

Chairman of the Board







AMENDMENT TO RETENTION AND SEPARATION AGREEMENT

AND GENERAL RELEASE OF ALL CLAIMS




This Amendment to the Retention and Separation Agreement and General Release of All Claims
(“Amendment”) is made by and between La Jolla Pharmaceutical Company (“LJPC”) and Deirdre Y.
Gillespie M.D. (“Gillespie”), and amends the Retention and Separation Agreement and General Release
of All Claims (“Agreement”) between those same parties by extending the promises and mutual
agreements of each and every paragraph, except paragraph 10 and its subparts, of that Agreement
through the Separation Date.



1. Older Workers’ Benefit Protection Act. This Amendment is intended to
satisfy the requirements of the Older Workers’ Benefit Protection Act, 29 U.S.C. Sec. 626(f).
Gillespie, by this Amendment, is advised to consult with an attorney before executing this
Amendment.



1.1 Acknowledgments/Time to Consider. Gillespie acknowledges and agrees
that (a) Gillespie has read and understands the terms of this Amendment; (b) Gillespie has been
advised in writing to consult with an attorney before executing this Amendment; (c) Gillespie has
obtained and considered such legal counsel as Gillespie deems necessary; (d) Gillespie has been
given twenty-one (21)days to consider whether or not to enter into this Amendment (although
Gillespie may elect not to use the full 21-day period at her option); and (e) by signing this
Amendment, Gillespie acknowledges that she does so freely, knowingly, and voluntarily.



1.2 Revocation/Effective Date of Amendment. This Amendment shall not
become effective or enforceable until the eighth day after Gillespie signs this Amendment. In
other words, Gillespie may revoke her acceptance of this Amendment within seven (7) days after the
date Gillespie signs it. Gillespie’s revocation must be in writing and received by Craig R. Smith
M.D., Chairman, Board of Directors, by 5:00 p.m. Pacific Time on the seventh day in order to be
effective. If Gillespie does not revoke acceptance within the seven (7) day period, Gillespie’s
acceptance of this Amendment shall become binding and enforceable on the eighth day (“Effective
Date of the Amendment”).



1.3 Preserved Rights of Gillespie. This Amendment does not waive or
release any rights or claims that Gillespie may have under the Age Discrimination in Employment Act
that arise after the execution of this Amendment. In addition, Amendment does not prohibit
Gillespie from challenging the validity of this Amendment’s waiver and release of claims under the
Age Discrimination in Employment Act of 1967, as amended.



THE PARTIES TO THIS AMENDMENT HAVE READ THE FOREGOING AMENDMENT AND FULLY UNDERSTAND EACH AND EVERY
PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE FREELY AND VOLUNTARILY EXECUTED THIS
AMENDMENT ON THE DATES SHOWN BELOW.



	 	 	 
	Dated:
	 	By:

	 	 	Deirdre Y. Gillespie M.D.

	 	 	La Jolla Pharmaceutical Company

	Dated:
	 	By:

	 	 	Craig R. Smith M.D.

Chairman of the Board